Online lender ING has become the latest bank to lift its variable home loan rates following an announcement earlier today.
The lender will raise rates across all of its variable rate home loan products by 15 basis points, effective as of February 7, 2019.
The out of cycle move comes just a week after major bank NAB finally succumbed to increased funding pressure by raising a number of its key variable rate home loan products by between 12 and 16 basis points.
RELATED: Last to fall: NAB hikes home loan rates, here’s how it stacks up to the other big banks
And according to Mozo Product Data Manager, Peter Marshall, today’s decision by ING to increase rates was likely influenced by similar factors.
“It’s a pretty big move and I think it’s a reflection of the bank bill swap rate remaining elevated. A lot of banks moved rates last year to cover increased funding costs and while the bank bill swap rate did fall back a bit towards the end of last year, it has since jumped again.”
“As a result of the latest jump I think it’s very likely that we’ll see even more lenders looking to increase variable rates in the near future - something I fully expect the RBA to consider when making their rates decision.”
Is it time to make a move?
So just how hard will the latest rates hikes from ING hit their customers pockets?
Mozo calculated that an ING owner occupier customer paying principal and interest on a $400,000 Orange Advantage Package home loan will pay an extra $411 in repayments each year as a result of the lift from 3.78% to 3.93%.
“The simple fact is that ING customers will now be paying more on their mortgage repayments, so now is probably the time to be looking around to see if there are any better options out there,” said Marshall.
“ING often have good rates but they’re not the best in the market, so there are plenty of other lenders, particularly smaller ones, where borrowers can go to find themselves a better deal.”
Top 5 variable rates in the Mozo database*
3.44% - Reduce Home Loans Rate Lovers Variable Home Loan
3.49% - Easy Street Standard Variable Home Loan
3.49% - Well Home Loans Well Balanced
3.54% - FreedomLend Variable Home Loan
3.54% - Homestar Variable Rate Loan
Looking for a more competitive home loan deal? Check out some of the hot offers below, or head over to the Mozo home loan comparison tables for more great deals.
*Rates accurate as of 31/01/2019 an calculated on a $400,000 owner occupier principal and interest home loan with an LVR of 80%